Florida homeowners, already facing an anxious few months because of the COVID-19 pandemic, face a new threat - the prospect of major cost increases for property insurance.
As the Sun Sentinel reported Sunday, the increases could range from 30% to 40%. They would come just as Gov. Ron DeSantis has ended the moratorium on mortgage foreclosures. It also seems likely that Senate Republicans won't pass a second COVID-19 stimulus bill that could help laid-off homeowners pay their insurance premiums.
How will the Florida Legislature respond? If history is a guide, the priority will be to please the insurance industry, not policyholders.
That's because we have been here before - after Hurricane Andrew in 1992 and after the active hurricane seasons of 2004 and 2005, which culminated in Hurricane Wilma. Now we are here after Hurricane Irma in 2017 and Hurricane Michael in 2018, even though neither storm made a direct hit on one of Florida's major population centers.
The cycle of shocking rate hikes for homeowners insurance began after Andrew devastated southern Miami-Dade County in 1992. Over the previous two decades, insurers had competed for business in the nation's fastest-growing state. Hurricanes had brushed the state or struck less-populated areas.
After Andrew, though, the market collapsed. Large national insurers such as Allstate and State Farm began fleeing the state. Thus began three decades of the Legislature trying to prop up the private windstorm - hurricane coverage - market in particular and the homeowner market in general.
The list of favors for the industry is long and significant. The Legislature allowed companies to drop coverage for mold and sinkholes as part of standard policies. The Legislature created the Hurricane Catastrophe Fund, funded by assessments on all policies, to offer subsidized reinsurance, which insurers buy to guard against major losses, like bookies laying off bets.
When a state appeals court ruled that homeowner policies had to pay claims for wind-driven rain damage, the Legislature passed a law freeing insurers from that requirement. Home insurers can file for rate increases up to 15% without a full hearing before the Office of Insurance Regulation.
And the Legislature created Citizens Property Insurance Corp., a state-run insurer of last resort. Homeowners who can't find coverage elsewhere can get it from Citizens.
All those favors, however, haven't been enough. The insurance industry regularly offers reasons why rates can't go down. The companies blame public adjusters, who pursue claims on behalf of homeowners, and lawyers who pursue those claims. They blame the cost of reinsurance, which is rising because companies have suffered big losses from COVID-19 business interruptions.